Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.20.4
Segment Information
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment Information Segment Information
As of December 31, 2020, Sonic had two operating segments: (1) retail automotive franchises that sell new vehicles and buy and sell used vehicles, sell replacement parts, perform vehicle maintenance, warranty and repair services, and arrange finance and insurance products (the “Franchised Dealerships Segment”); and (2) pre-owned vehicle specialty retail locations that provide guests an opportunity to search our nationwide inventory, purchase a pre-owned vehicle, select finance and insurance products and sell their current vehicle to us (the “EchoPark Segment”). Sonic has determined that its operating segments also represent its reportable segments.
The reportable segments identified above are the business activities of Sonic for which discrete financial information is available and for which operating results are regularly reviewed by Sonic’s chief operating decision maker to assess operating performance and allocate resources. Sonic’s chief operating decision maker is a group of three individuals consisting of: (1) the Company’s Chief Executive Officer; (2) the Company’s President; and (3) the Company’s Chief Financial Officer.
Reportable segment financial information for the year ended December 31, 2020 are as follows:
Year Ended December 31,
2020 2019 2018
Segment Revenues: (In thousands)
Franchised Dealerships Segment Revenues:
New vehicles $ 4,281,223  $ 4,889,171  $ 4,974,097 
Used vehicles 2,345,936  2,493,467  2,370,799 
Wholesale vehicles 168,655  180,020  197,184 
Parts, service and collision repair 1,194,394  1,366,550  1,364,559 
Finance, insurance and other, net 357,848  363,117  344,814 
Franchised Dealerships Segment revenues $ 8,348,056  $ 9,292,325  $ 9,251,453 
EchoPark Segment Revenues:
Used vehicles $ 1,218,896  $ 996,505  $ 602,699 
Wholesale vehicles 28,723  22,926  20,441 
Parts, service and collision repair 39,341  28,753  16,328 
Finance, insurance and other, net 132,026  113,834  60,709 
EchoPark Segment revenues $ 1,418,986  $ 1,162,018  $ 700,177 
Total consolidated revenues $ 9,767,042  $ 10,454,343  $ 9,951,630 

Year Ended December 31,
2020 2019 2018
Segment Income (Loss) (1): (In thousands)
Franchised Dealerships Segment (2) $ 231,175  $ 211,267  $ 157,413 
EchoPark Segment (3) 4,078  9,146  (52,587)
Total segment income (loss) $ 235,253  $ 220,413  $ 104,826 
Impairment charges (4) (270,017) (20,768) (29,514)
Income (loss) from continuing operations before taxes $ (34,764) $ 199,645  $ 75,312 
New and Used Vehicle Unit Sales Volume:
Franchised Dealerships Segment 195,145  226,760  232,885
EchoPark Segment 57,161  49,520  29,437
Total new and used vehicle unit sales volume 252,306  276,280  262,322 

(1)Segment income (loss) for each segment is defined as income (loss) from continuing operations before taxes and impairment charges.
(2)For the year ended December 31, 2020, the above amount includes approximately $4.0 million of pre-tax net gain on the disposal of franchised dealerships. For the year ended December 31, 2019, the above amount includes approximately $76.0 million of pre-tax net gain on the disposal of franchised dealerships, offset partially by approximately $7.2 million of pre-tax net loss on the extinguishment of debt and approximately $6.3 million of pre-tax executive transition costs. For the year ended December 31, 2018, the above amount includes approximately $38.9 million of pre-tax net gain on the disposal of franchised dealerships, offset partially by approximately $4.0 million of pre-tax storm-related physical damage costs, approximately $1.7 million of pre-tax legal costs, approximately $1.6 million of pre-tax executive transition costs and approximately $1.4 million of pre-tax lease exit charges.
(3)For the year ended December 31, 2020, the above amount includes approximately $5.2 million of pre-tax net gain on the disposal of land and buildings at former EchoPark Locations. For the year ended December 31, 2018, the above amount includes approximately $32.5 million of pre-tax long-term compensation-related charges.
(4)For the year ended December 31, 2020, the above amount includes approximately$270.0 million of pre-tax impairment charges for the Franchised Dealerships Segment. For the year ended December 31, 2019, the above amount includes approximately $1.1 million of pre-tax impairment charges for the Franchised Dealerships Segment and approximately
$19.7 million of pre-tax impairment charges for the EchoPark Segment. For the year ended December 31, 2018, the above amount includes approximately $27.9 million of pre-tax impairment charges for the Franchised Dealerships Segment and approximately$1.6 million of pre-tax impairment charges for the EchoPark Segment.
Year Ended December 31,
2020 2019 2018
(In thousands)
Impairment charges:
Franchised Dealerships Segment $ 270,017  $ 1,101  $ 27,932 
EchoPark Segment —  19,667  1,582 
Total impairment charges $ 270,017  $ 20,768  $ 29,514 

Year Ended December 31,
2020 2019 2018
(In thousands)
Depreciation and amortization:
Franchised Dealerships Segment $ 79,929  $ 82,636  $ 85,849 
EchoPark Segment 11,094  10,533  7,774 
Total depreciation and amortization $ 91,023  $ 93,169  $ 93,623 

Year Ended December 31,
2020 2019 2018
(In thousands)
Floor plan interest expense:
Franchised Dealerships Segment $ 24,066  $ 45,055  $ 46,126 
EchoPark Segment 3,162  3,464  2,272 
Total floor plan interest expense $ 27,228  $ 48,519  $ 48,398 

Year Ended December 31,
2020 2019 2018
(In thousands)
Interest expense, other, net
Franchised Dealerships Segment $ 40,624  $ 51,231  $ 52,396 
EchoPark Segment 948  1,722  1,663 
Total interest expense, other, net $ 41,572  $ 52,953  $ 54,059 

Year Ended December 31,
2020 2019 2018
(In thousands)
Capital expenditures:
Franchised Dealerships Segment $ 92,340  $ 89,332  $ 116,854 
EchoPark Segment 34,843  36,244  46,765 
Total capital expenditures $ 127,183  $ 125,576  $ 163,619 
 
December 31,
2020 2019
(In thousands)
Assets:
Franchised Dealerships Segment $ 3,096,811  $ 3,797,878 
EchoPark Segment 478,869  244,054 
Corporate and other:
Cash and cash equivalents 170,313  29,103 
Total assets $ 3,745,993  $ 4,071,035